Unlike resale purchases, pre-construction condos include two separate closing stages-which are known as the interim occupancy stage and the final closing stage, respectively.
Interim Occupancy is the period which takes place prior to the registration of the condominium. At this stage the buyers are granted an occupancy licence granting them the right to occupy the unit. Upon receipt of a document known as an “Interim Statement of Adjustments”, your lawyer will schedule an appointment with you. During this appointment, the Interim Closing documents will be signed. Occupancy fees will be paid at this time. These fees are made up of three parts: an estimate of taxes, projected condo fees, and a monthly interest payment that reflects the remaining amount owed on the purchase price. Once interim occupancy documents have been signed, you will be given a time and place to pick up the keys to your unit.
- While you are able to occupy your suite during interim occupancy, the “title” to it has not yet been granted. This is because the condominium has yet to be registered, and said registration occurs once all the suites and common areas have been completed. Therefore, units located on lower floors will go into interim occupancy earlier as the building will occupy starting from the lower floors and move upward. Purchasing on a lower floor means an earlier move-in date, but a longer time paying interim occupancy fees. At the same time, units higher up in the building will normally have a move-in date that is much closer to final closing. Interim occupancy typically ranges from 4 months to 1 year depending on the size of the building. You should also be advising your bank as soon as you receive your notice of final occupancy in order to finalize your mortgage application.
- At the conclusion of the interim occupancy period, your lawyer will notify you of the date for final closing. Once you have that date, the first course of action is to notify your bank and advise them of the date for which funding is required. Then, a few days before closing your lawyer will send you the Final Statement of Adjustments. This document lays out all the fees due upon final closing, which normally include (but are not limited to):
- HST tax/rebate (payable should this not be your principal residence)
- Any unpaid deposits
- Occupancy fees for the month of closing
- Property and realty taxes
- TARION enrollment fees
- Development charges
- Education levies
- Parkland contribution
- Balance of the purchase price still owed
One more meeting with your lawyer is required-at this time you will sign your final documentation. Final payment, via a bank draft or certified cheque, is also required for this meeting. This payment covers everything included in your Final Statement of Adjustments, as well as title insurance, land transfer taxes and lawyer fees. Several documents are mandatory at this meeting:
- Two pieces of government-issued ID
- A bank draft or cheque to cover the items described above.
- One post-dated cheque made out to the condominium corporation, for one month of condo fees
- One void cheque for the automatic payment of condo fees after the first month.
These documents will then be sent to the developer, and upon review by their legal team your registration will be processed. Once registration is complete, you will receive the official title to your residence.
More info about closing costs can be found here.